Zimbabwe as a testing ground for Bitcoin

After the seizure of the capital Harere by the military, the cost of bitcoin in Zimbabwe soared to almost $ 14 thousand. On the morning of November 17, the demand grew considerably on Golix, the exchange point for bitcoin in Zimbabwe.

It is noted that a jump in the price of the crypto-currency was due to the fact that the armed forces seized power after last week’s confrontation with the government of President Robert Mugabe: the army blocked the roads to government buildings, parliament and courts in Harare and detained the head of state.

Zimbabwe does not have its own currency, the US dollar and the South African currency are taken as legal tender. The country abandoned its own currency – the Zimbabwean dollar in 2009 due to hyperinflation, which completely depreciated it.

Golix, an unregulated platform that trades with other crypto-currencies other than bitcoin, has been in effect since 2014. According to the co-owner of the exchange, Taurai Chinyamakobwa, prices are set depending on supply and demand.

Zimbabwe is currently experiencing a deep crisis. Since 2000, the economy has fallen by half: about 95% of the working-age population are unemployed, and 3 million people have been forced to migrate.

The popularity of bitcoin in Zimbabwe is an attempt to protect itself from hyperinflation. People invest in the crypto- currency, despite the fact that they often hear the opinion of the “bubble” in the crypto-currency sector. In addition, it is very difficult to make international payments from Zimbabwe due to the closure of banks or the termination of transactions via MasterCard and Visa cards.

The Bitcoin rate made a giant leap in less than a week – last Monday the rate was $ 6,366.73, and on Friday the crypto -currency set a historical record, exceeding $ 8 thousand.

The bitcoin rate reached a new historical maximum on the night of November 17, when the value of it at Exchange Bitfinex exceeded $ 8 thousand. Then the rate was corrected, and the following morning, bitcoin was trading at around $ 7,500-7,900 per coin, according to data from the Coinmarketcap portal. The previous record figure ($ 7,882) was reached on November 8.

According to Spencer Bogart, the head of the research department at Blockchain Capital, the growth is connected with the revival of interest in SegWit2x.

In the bitcoin system, there was to be an update of the protocol (SegWit2x), which was intended to change a number of rules. The attitude of market participants to this project remains controversial. Some players expected that with its launch the price for the crypto-currency would increase, and many “held on” to bitcoin. However, in the end, the launch of SegWit2x was postponed.

At the time of publication, bitcoin rate was $ 8046.48, capitalization of the first crypto-currency reached $ 134 billion. Experts and analysts note that there is nothing unusual in such bitcoin volatility and in the long term the value of the crypto-currency will only grow. By the end of the year, the market expects $ 10 thousand for bitcoin, that is about 20% higher than current levels.

Inessa Sinchougova is an Editor and Journalist at Fort Russ News, as well as a research fellow and translator of the Belgrade based think-tank, the Center for Syncretic Studies. She was educated at Victoria University of Wellington (New Zealand), in the field of Political Science and was previously employed in Marketing and Communications Strategy for a Multi-National Corporation. She runs a popular YouTube channel for translations of key Russian Foreign Policy figures and appears regularly on other alternative media channels. If you like her work, you can support her Patreon here.